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Thursday, 14 October 1971
Page: 2371


Mr GRASSBY (Riverina) - I support the amendment moved by the honour able member for Dawson (Dr Patterson). I should like to refer briefly to the general points made by the honourable member for Wakefield (Mr Kelly) who has just resumed his seat. First, he seemed to be saying throughout most of his address that he doubted very much whether acquisition was the answer to the wool growers' problems. He questioned acquisition as an approach. Well, the Opposition has made its decision and it is up to the honourable member to make his decision. I was also surprised that he should interpret what was said by Opposition members, including the honourable member for Dawson, as in some way questioning the need to assist substantial wool growers. By substantial, I mean wool growers with substantial holdings and substantial numbers of sheep. This was not the basis of our approach.

The Opposition has a very simple approach to this problem. "We say that the taxpayers' money should not be used, for example, to add to the profits of overseas corporations which in the last 12 months have shown a net profit of $12m and a 14 per cent return on capital. We maintain that there is no need to do this. Yet, in effect, the honourable member for Wakefield said: 'Well, you cannot do anything else because it is not possible to have a needs basis for any programme'. This is extraordinary because only yesterday the Minister for Education and Science (Mr Malcolm Fraser) introduced a new needs policy relating to schools. So, it seems that it can be done but that there is a lack of will to do it. However, I am not particularly concerned about what T regard as minor objections. I am concerned at the fact that this legislation has been introduced by the Minister for Primary Industry (Mr Sinclair) as part of a complex of measures to help and to rescue the stricken countryside. For the third time in 24 hours I refer to the fact that the rural reconstruction scheme is stalled in New South Wales.


Mr Sinclair - That is utter nonsense.


Mr GRASSBY - The Minister for Primary Industry says: 'That is a lot of nonsense'. I refer him to the Liberal Minister for Lands in New South Wales who administers the scheme and who yesterday spoke about the rural reconstruction scheme in the New South Wales Legislative Assembly. A Press report of his speech states;

The State Government would not be able to give more financial aid to farmers under the Rural Reconstruction Scheme unless the Federal Government provided more funds by the end of the month, the Minister for Lands, Mr Lewis, said yesterday.

I challenge the Minister for Primary Industry to return to the chamber. The Press article continued:

He had already sent a telegram to the Minister for Primary Industry saying he felt the proportion of money for financial reconstruction was running out but this had failed to bring an increase in the allocation.

I intend to speak to the Premier later, and ask him to contact the Prime Minister, and I will be contacting the Minister for Primary Industry, to see if it is possible for us to gain additional funds', Mr Lewis said.

The response of the Minister for Primary Industry is: 'That is a lot of nonsense'. You take that story to the New South Wales Minister and his Government and answer them.


Mr Sinclair - I did that a fortnight ago.


Mr GRASSBY - You did?


Mr DEPUTY SPEAKER -Order! The honourable member will address his remarks to the Chair.


Mr GRASSBY - Well, I am happy to do that, Mr Deputy Speaker, but I suggest that the Minister has some part in this dialogue. It is extraordinary that the Minister should say that he has already dealt with this because these statements were made in the New South Wales Parliament only yesterday. From a practical point of view, only $4.5m is left for reconstruction in New South Wales in the next 3i years. Yet the Minister says: 'That is a lot of nonsense'. I hope that Government supporters will see him in his chambers afterwards.

The Minister has introduced this wool scheme as part of a complex of measures which the Government claims is the answer to the rural crisis. This scheme is supposed to be an emergency grant for only 1 year to help the struggling wool grower. 1 point out right away that the whole of the operation of the scheme is designed to do 4 things. Firstly, it will pay the most money to those who have the most sheep. Secondly, the formula means that the man with the lowest return will receive the least. Thirdly, the overall effect will be to give the most to those who need it the least. Fourthly, to compound these errors, although the scheme is designed to help the struggling man on the land, the Government will pay the money not to the grower but to the broker. If the broker decides to pass on the subsidy to his debtor client, the grower will receive it. If the broker says: 'No, we would like it. We need it. We want it', the wool grower will get nothing.

We know from the structure of the rural debt that 95 per cent of the more than S2,000m which is owed across the nation is owed to banks, pastoral finance companies and insurance companies. All of these institutions have done particularly well in the last 2 years despite the rural crisis. For example, the banks have reported record profits. The pastoral finance companies, as a result of their very astute operations - I commend them for their diversification - have reported multi million dollar profits. Likewise, the insurance companies have shown extraordinarily good profitability. So, the Government's method of providing help for the wool growers in trouble is to give the money - which, as the honourable member for Dawson pointed out, is the taxpayers' money - not to the struggling wool grower as an emergency grant but to the pastoral finance companies. Their debtors, whose wool is involved will be hoping to goodness that the companies will pass it on. In his second reading speech, the Minister said:

The payments . . . will depend upon the active co-operation of persons carrying on business as brokers, registered classing houses, wool merchants and agents who export wool, or who sell wool by tender on behalf of producers.

That is the rule, but the decision is left to the brokers. Of course, the Government hopes that they will co-operate. It is obvious that this is the last desperate attempt by the Government not to help the wool grower but to save the discredited auction system. The Minister admitted this when he said:

The whole of the Government's deficiency payments scheme and the market support by the Commission is based on the auction system.

Why does the Government have such a desperate preoccupation with the auction system? Why is there this utilisation of taxpayers' money to shore up a system which is archaic and which is a hangover from the past? In the course of his second reading speech the Minister also took a pretty heavy swipe at the private wool buyer. In effect, the Minister said: 'This is the man who is depressing the market'. That is an interesting observation. Why does a wool grower go to a private wool merchant? He does not go to him out of love and affection. In the cases that I know, and I speak from some personal knowledge, he goes to him because the private wool merchant offers a better net return. I do not see anything wrong with that in the present depressed conditions in the country. In fact, at first the Minister was going to exclude private sales from the scheme, but he has now brought them into the scheme again.

I turn now to the question of the guarantee payment of 36c a lb. I have seen a whole sheaf of Press headlines on this topic. 'The Country Party stands firm on 40c' and 'If you do not do this we will sack you if you do not sack the Government' - these were the fighting words across the countryside. Again, the headlines proclaimed: 'Wool men demand action' and 'End the coalition'. What brave words! The tribal rock musical on my left is no excuse for effective opposition to something that is less than useful. The guaranteed price is 36c a lb and not 40c a lb. A Victorian member is interjecting. The voice of organised farming people in Victoria said that the wool price guarantee of 36c a lb is no real help. Let the honourable member go back to his electorate and tell his people what he has said about this matter. We should consider what is actually happening today. In the last few days a grower whom I know and who had held 500 bales of wool for as long as he could, has been approached by the people to whom he owes money and they have said to him: 'We want that wool. We will put a price on it and it will go in. We are going to clear the store and the price on the move is 17c a lb.' This is the sort of situation that we face.

But let us come down to the specific. The Minister for Primary Industry has received urgent representations from some of the leading stud masters in Australia. In one case a stud producing some of the finest sheep and the finest wool in the nation faces extinction. The assets are there, the management is sound but because, in one instance anyway, there were difficulties caused by Government resumptions for other purposes, the whole enterprise finds itself caught up in the rural recession and a vicious credit squeeze. The Minister knows the case. He has said that he wants to see the stud continue as the basic lifeblood of the nation's greatest export industry. But he knows that this scheme will not be the answer. In fact, his original proposal, which I am glad to see he has changed, would have been even more of a disaster because it would have excluded in some years half the wool from some areas, including some of the areas that I represent. Well, he has seen the error of that and he has changed it, and I compliment him on that. But here we have a scheme that will not save some of the strongest men in the industry, let alone the struggling wool grower. I invite the Minister when he replies to answer specifically. He knows the cases. He knows the circumstances and he will either help or not help. But the decision is his. 1 know we have regular alibis as to the global position in regard to wool. Let us look at them. In the last couple of years, global consumption of wool has risen by more than 2 per cent. Global production has risen by less than i per cent and the utilisation of wool as a percentage of an apparel fibre - and this is an interesting fact - has dropped by only 1 per cent from 9 per cent in 1963. That is a pretty dramatic figure. Where has the movement been? The big movement has been the increase in non-cellulosic fibres at the expense of cotton - not wool but cotton. There was a drop in cotton utilisation in that time from 63 per cent to 54 per cent and an increase in the non-cellulosic fibres from 8 per cent to 2 1 per cent. But against these figures, the price drop in Australia has been 33 per cent, and the figure is higher now. It just does not make sense unless the fact is recognised that the wool auction system is the greatest surviving charade since Punch and Judy.

Where does the Opposition stand? lt stands behind this amendment clearly and definitely. It stands for the urgent establishment of a national wool authority to acquire, appraise and market the clip in a streamlined way. It has been estimated within the industry itself that savings of 10c per lb can be made in handling, and savings of up to Se and 6c per lb in overseas freight. That is only on present preliminary assessments. The Opposition stands for the injection of sufficient funds at 3 per cent interest to keep the viable growers in business, as our spokesman on primary industries (Dr Patterson) said today, and a moratorium in every case of need. In New South Wales, co-operation with a State Labor government there would mean $500m by means of bank guarantee, at a 3 per cent subsidised interest rate, and incidentally it would cost the taxpayer only $15m to achieve that level of assistance.

Once the Authority is established and the old fragmented system replaced the way is open for entirely new ventures. I would like to mention one that has been thought of by the United Nations Relief and Rehabilation Administration mission which went to China way back in 1947. Members of that mission thought of what could be done in relation to China even as long ago as 1947. This was the idea of a Australian Chinese wool corporation. We could be active in placing wool before a quarter of the world's population. The objective would be to sell to China each year raw wool to be processed there. A 5- year plan has been suggested and discussed by responsible industry people. It would mean that ultimately we would have a partnership which would arrange for the utilisation of large quantities of raw wool for, as I say, a quarter of the world's population. There are people in China who are interested in this. The honourable member for Dawson knows this from his onthespot investigation. There are people interested in this in our own industry. Submissions have been made. But how can we proceed, with the present fragmented and inadequate structure that we still have? A national wool authority is a necessity to initiate such new ventures as this.

Let me again warn the Minister and the Government that if they leave this thing as it is, if they administer it as they now propose, if they fail to take possession of the clip and properly organise its marketing, if they do not take action to save the reconstruction programme, then they will in fact drive 100,000 people, growers and those associated with them, into the cities. I am appalled and shocked . to hear the

Minister say today that there is no crisis in rural reconstruction and that there is no problem in New South Wales.


Mr Sinclair - I did not say that.


Mr GRASSBY - That is what you said earlier.


Mr DEPUTY SPEAKER (Mr Hallett - Order! Interjections are out of order.


Mr GRASSBY - If the Minister is apologising for his original statement I am delighted. He had better answer clearly and definitely. He is dealing with the lives and responsibilities of people, not in abstractions. I know that there are powerful city vested interests that are quite happy to see their labour forces augmented by 100,000 people from a denuded countryside. They have said so. They are quite happy about it.


Mr Corbett - They will get them under, a 35-hour week to.


Mr GRASSBY - My goodness; what a tired old statement we get again from the tribal rock musical on my left. Let us be quite clear about this. We are dealing with serious matters and not with Party politics. A few honourable members on my left are still trying to interject. I am glad to hear that there are some fighting voices. 1 put on record here that we fought for our policies. We are still fighting for some of them. At least we are fighting and not sitting like stunned galahs unfit for export. The crisis is worsening. 1 would invite all of the members of the Parliament to address themselves to the problems in hand.


Mr Fulton - Do not upset yourself; just carry on.


Mr GRASSBY - My good colleague on my right says: 'Do not upset yourself. This is a time when members of the House of Representatives ought to be concerned. When honourable members receive calls and visits from people who are on the verge of extiction, from families who have been in the business of farming and who have been on their properties as efficient managers not just for one year, or 10 years, but in some instances up to 100 years, and who through no fault of their own are caught up in an artificial situation brought about by an archaic handling sys- tern, then it is time to get concerned. I make no apology whatsoever for my concern. I want to draw attention to the fact that in every case across the nation the suggestion that there should be simply 36c a lb as a support for one year of emergency was rejected. Let us just look at some of the people who were concerned in that rejection. There were spokesmen for wool growers. One is Mr P. B. Leach, Federal President of the Australian Wool and Meat Producers Association, Australia's largest wool grower organisation. He said:

.   . anything less than 40c a lb would see thousands of farmers wiped out before a more effective marketing scheme could be implemented.

He continued:

Such a tragedy will automatically cause a mass exodus of more than 100,000 rural dwellers throughout Australia to towns and cities.

I would think that Mr Leach is probably a member of the Country Party, but that is his privilege. It does not always have to be a matter of party politics.


Mr Turnbull - He is a very loyal member too, I might tell you.


Mr GRASSBY - The honourable member for Mallee (Mr Turnbull) says that he ls a very loyal member. That is all the more reason why the honourable member for Mallee should take some notice of what he says. The next statement that I would draw to the attention of the House is one by Mr Solomons, the New South Wales State Chairman of the Country Party - not the Mr Solomons who is the new member for Tasmania or the new member for Coiro, but Mr Solomons of New South Wales. He said:

The Country Party would have to consider its position in the Federal Government if Cabinet rejected the wool industry proposal for a 40c minimum return . . .

This was a challenge. I say to New South Wales Country Party members that this was something that was put forward by the State Chairman of the Country Party in New South Wales. What happened to that challenge? It was sort of evacuated or it evaporated. Let me refer again to Mr Anthony. I quote from the Melbourne Age' of 27th July 1971 which states:

The annual conference of the Western Australian Country Party yesterday telegraphed the Party's Federal Leader (Mr Anthony) asking him to stand firm on a 40c minimum price for wool even if it meant breaking the Liberal-Country Party coalition.

My goodness, that great effort evaporated pretty quickly. Then, in New South Wales Mr Milton Taylor, a well known grower leader, demanded that the Government's delay in facing the wool situation - and he was referring to the 40c per lb subsidy and acquisition - was a case of Nero fiddling while Rome burns. Right across the nation there is this sort of situation. I refer to a remark by Mr Sewell in the 'Victorian Farmer'. He maintains that in the present situation and with the present recommendation 20.000 wool growers will not survive I am putting these views forward in all sincerity. They are not party political views as has been just acknowledged by the members on the Government side pf the House. The wool growers are people who are concerned about the future of their industry; they are people who expressed the hope that in the Parliament there would be some sort of joint approach on this problem. But there has not been a joint approach. There has been an abdication of responsibility in meeting basic demands.

I sum up in this way: The crisis is worsening and the time for action is now. I support with every bit of conviction that I can muster the amendment moved by the honourable member for Dawson and the policies we put forward today.







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